India

Gujarat launches its second wind tender

INDIA: The wind-rich western state of Gujarat has announced a second 500MW auction, while neighbouring Maharashtra's first tender failed to produce record-low prices.

Indian states of Maharashtra and Gujarat are holding wind tenders (pic: Suzlon)

Gujarat recorded the lowest ever tariff of INR 2.43/kWh ($0.037/kWh) in its first auction last year.

The new 500MW auction announced by the state utility allows overseas investors, in addition to Indian players, to bid with the provision that they will have to create special purpose vehicles (SPVs) under the Indian Companies Act.

The auction terms stipulate a minimum bid size of 25MW and a 25-year power purchase agreement (PPA) with the utility.

Developers will have to provide financing for their projects within seven months from the PPA signing date. The deadline for bid submission is 2 April.

Interestingly, going beyond the bid capacity on offer, the utility has proposed a "greenshoe option".

This will allow it to award an additional 500MW capacity to successful bidders that are willing to match the lowest successful bid in the auction.

Central utilities and government sector enterprises will be given priority allocation for this additional quota.

Considering that past auctions were oversubscribed and also had negligible difference in bid spread, the "greenshoe option" could be a great way for the utility to get additional 500MW without conducting another auction.

Maharashtra tender

Meanwhile, Maharashtra's first wind power auctions saw tariffs average nearly 17% more than the lowest tariff of INR 2.44/kWh ($0.037/kWh) in the federal 2GW auction last month.

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